The way you define your client today will shape the trajectory of your business tomorrow. So, who exactly do you see as your client?
How you answer this question has direct implications for your future growth. Many advisors tend to concentrate on the client or couple, with less consideration of the children or other family members.
But why wouldn’t you take the time to engage them? These family members are warm leads versus cold prospects, and more than likely they’ve already heard good things about you. Gaining additional business should come naturally. Plus, research consistently reveals that the children of wealthy parents tend to achieve additional wealth themselves, making them great clients in their own right.
Once you start viewing your work through the lens of creating clients for life, you might start to sense a difference. You’re no longer looking to complete a transaction or a one-time event, but to build lifetime relationships which benefit all parties. A broader perspective can have you engage not only children of your clients, but your clients’ in-laws, brothers, sisters, and others.
Picture your client as the center of the family, and then ask yourself if you have explored all the opportunities presented. Chances are good you’ll find that you still have room to grow with your current client base.
This table illustrates three generations, each representing distinct opportunities. Understanding their needs could help you unlock growth opportunities to expand and diversify your client base. Here are some questions to get you started.
|
Parents |
Are your clients’ parents still alive? |
Have you talked about their parents’ needs? |
Have you met their parents? Would they know your name? |
Are either of the parents your clients? |
|
Clients |
Who are your best clients? |
Is the spouse involved in your discussions and/or decision-making? |
Who is the go-to family member when your client needs help? Think POA, or executor named. |
Who is the executor of your client’s estate? The trustee of their trusts? |
|
Children |
Do your clients have any children? |
Do you know their children’s names or ages? Hobbies? |
Have you met any of the children? Would they know your name? |
Have you retained any of the children as your clients? |
For a long time, we’ve known that advisors need to work on developing relationships with both spouses. Too often, the male client receives the bulk of the attention, and the female client might not speak up or even attend meetings.
Some progress has been made, but not enough. According to the Fidelity Investments research paper "Navigating the Decade of Generational Wealth," the startling fact is that 70 percent of widows will change financial advisors within a year of their partner’s death. A widow’s decision that she can do better elsewhere means she hasn’t felt part of the relationship and/or that trust hasn’t been built.
For any fee-based business, retention of clients has to be your number one priority – and having almost three-fourths of your relationships possibly at risk is untenable. And business aside, a widow grieving her spouse and facing all sorts of life changes and complex financial challenges and family situations should be able to turn to her advisor for trusted support, comfort, and clarity at this difficult time. She shouldn’t have the added stress of trying to find an advisor she’s comfortable with.
In addition to needing to better help women, our industry is facing a generational wealth transfer on a scale that will transform the wealth profile of many Gen XYZ investors. The same Fidelity study reveals that only 38 percent of investors say their advisors are a multigenerational resource, so there’s huge room for improvement.
As you meet with clients, start discussing how planning can help meet complex needs within the family, and make sure families understand that you’re equipped to support them and their children through challenging and complex issues. In addition to inheriting one day, these next-gen prospects could have great careers and contacts.
No matter which generation you currently help, you can expand your services to help the other members and deepen your current relationships at the same time. If you’re looking to gain additional assets, add new clients, and deepen client loyalty, the answer might literally be sitting right in front of you.
Kristine McManus is the chief advisor growth officer at Commonwealth Financial Network, where she helps financial advisors expand their businesses and achieve sustainable growth.
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